Question 1

Massachusetts Senator and one-time presidential candidate John Kerry understands the concept of tax avoidance. Kerry avoided paying $500,000 in taxes in Massachusetts by docking his yacht in Rhode Island. Rhode Island repealed sales taxes and annual excise taxes on yachts in 1993, making “the state something of a nautical tax haven.” Discuss the likely behavior changes of yacht-owning Massachusetts residents if Massachusetts lowered its tax rates on yachts, and how these changes would affect Massachusetts’s tax revenue.

Question 2

Describe in your own words the four proposed by Hofstede (power distance, uncertainty avoidance, individualism, and masculinity). Discuss, through examples, how these concepts might be applied to:

1) Managing foreign workers

2) Advertising products/services in foreign cultures

3) Negotiating across cultures

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